Eight Steps to Greater Housing Affordability: Master Builders

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Wednesday, August 20th, 2014
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Local councils would receive national competition style payments to improve supply of releasable land and speed up approval processes and would be required to maintain rolling 10-year land release schedules under an eight point plan being put forward by a leading building industry lobby group.

Outlining his organisation’s plan to improve affordability before the senate inquiry into affordable housing earlier this month, Master Builders Australia chief executive officer Wilhelm Harnisch said urgent reform was needed in order to boost affordability, and that addressing challenges required a wholesale commitment from federal, state and local governments through a reinvigorated Council of Australian Governments, including supply side reforms and measures to boost funding for social housing.

“Reducing the massive shortfall in new housing is the major challenge the nation faces in maintaining home ownership as a realistic aspiration rather than an unaffordable dream,” Harnisch told the inquiry.

Under Master Builders’ plan, councils would receive national competition-style payments when they improve the supply of releasable land or implement more efficient building and planning approval processes.

Local councils would also be required to develop long-term plans for land releases, which would identify and provide an indicative forward schedule of ‘greenfield’ and ‘brownfield’ releases over a 10-year rolling period.

Other elements of the plan include:

  • Agreed-upon ‘master plans’ that cover urban consolidation and urban and regional infrastructure plans to deliver a housing mix to meet the needs of different demographics.
  • Subjecting state and territory infrastructure charges to a housing affordability assessment, with penalties for jurisdictions which impose excess developer charges relative to affordability measures through reductions in transfer payments
  • The establishment of an online ‘info hub’ by the federal government to compare and contrast developer charges, land release schedules and the efficiency of planning processes.

Established in December last year, the inquiry is being conducted by the Senate Economics Reference Committee and received 219 submissions.

Despite cyclical improvements to affordability measures bought about by low interest rates, widespread concern about long-term shortages in housing supply throughout Australia persists – albeit with some commentators expressing sentiments that fears in this regard are being over-played by the construction industry.

In its most recent State of Supply report (2012/13), for example, the federal government’s former National Housing Supply Council warned persistent shortages in housing supply were impacting upon Australia’s most vulnerable citizens.

Last month, speakers at a Housing Industry Association Conference in Sydney talked about a ‘Not in My Backyard’ syndrome, and expressed concern that housing commencements were being held back by ‘constant roadblocks’ in terms of issues surrounding funding, planning, and minority interests.

In its submission to the committee earlier this year, Master Builders noted that housing in many Australian cities was “at best, ‘not affordable,’” and that action was needed to address the situation.

“As a nation, Australia has one of the highest levels of housing unaffordability in the world – being second only to Hong Kong on global league tables of housing unaffordability,” Master Builders said in its submission. “…the problem and the solutions are well-known; it is meaningful action which is in short supply.”

The committee is set to deliver its report on November 27.

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